“This Thing is Coming Down,” Says Gerald Celente

By Dominique de Kevelioc de Bailleul

In a lively Saturday interview on King World News, Gerald Celente began by ridiculing the media’s propensity to jump from one hyped event to the next during the global financial crisis, providing a unnecessary distraction from the all-important final outlook he forecasts for investors.

“This thing [financial system] is coming down,” Celente told KWN’s Eric King.

The outcome of the Greek election is not important, according to the founder of Trends Research Institute.  What’s happening in any country is not particularly important, per se; it’s the collective symptoms of a global financial collapse that investors should focus their minds upon before considering what to do to protect their wealth.

“The entire financial system is under collapse,” Celente forcefully continued.  “It’s not about the Greeks; it’s not about the Spanish; it’s not about the Italians; it’s not about the English; it’s not about the Americans; it’s not about the Chinese; it’s about everybody.”

‘It all comes back to gold,” he said.  Celente added that he is not an investment adviser, but has repeatedly stated in the past that he likes the yellow metal for its ancient reliability as the ultimate safe-haven during times of financial crisis.

Simultaneously, vital economic statistics across the global economy show steep drops or have begun to resemble bubble-like characteristics.  Suddenly, the global economic growth story, the West-East ‘decoupling’ theory, and the global ‘muddle-through’ thesis, increasingly appear to be nothing more than well-crafted media-driven nonsense.  It’s just a media con job to keep investors back on their heels and away from critical thinking regarding their savings and wealth, according to Celente.

It was Fed Chairman Ben Bernanke and his predecessor Alan Greenspan who claim they didn’t see the housing bubble, nor the dangers of more than one quadrillion dollars of derivatives written since 1999.

In August 2010, Bernanke told attendees of the Jackson hole Summit, “For a sustained expansion to take hold, growth in private final demand — notably, consumer spending and business fixed investment — must ultimately take the lead.

“On the whole, in the United States, that critical handoff appears to be under way.”

As it turns out, nothing could have been further from the truth.  The financial crisis deepened throughout 2010 and 2011, with revelations that Greece could not pay on its gigantic sovereign debt and by implications threatened to take the eurozone with it as other EU sovereigns would be next.

In the U.S., bogus jobs reports issued by the U.S. Labor Department, which showed an economic recovery, streamed in month after month.  In essence, the data merely show a halt of an immediate economic Armageddon, not a recovery.

Back then, gold traded at $1,200.

Today, global statistics point to a deepening of an already recessionary global economy, but the media continues to spin the data to help the Fed ‘manage expectations’.

Though, not complete, below, is a list of items that support Celente’s call for an impending next leg down in the global financial crisis.

ñ A property bubble about to burst in Canada

ñ Bank runs in Greece, Spain and Italy

ñ Spain housing market to drop another 25 percent, according to S&P

ñ Netherlands reports sudden 10 percent drop in retail sales

ñ EU proposes currency controls

ñ China reports rapidly decelerating GDP, ramps up gold imports

ñ Baltic Dry Index approaches 2009 low

ñ India’s currency, the rupee, is under attack

ñ Slovenia needs a bailout

ñ Cyprus needs a bailout

ñ Egypt in the throes of civil war, again

ñ Fed overtly monetizing debt 30-year treasuries, according to zerohedge.com

ñ U.S. job market is fictitious, according to John Williams and Charles Biderman.  Real unemployment is 22 percent

ñ U.S. consumer tapped out and buying necessities with credit cards

ñ Global recession next year pegged at “100 percent” certainty, according to Marc Faber.  Jim Rogers agrees with Faber’s assessment and includes 2014 as a worse outlook

Countering misleading comments made by officialdom throughout the crisis—blatantly appearing to follow the playbook of former President of the European Council Jean-Claude Juncker, who once said, “When it becomes serious, you have to lie,” —Celente told KWN listeners to not expect the truth out of Washington or Brussels.  You must “think for yourself” and that “you’re on your own” while the global financial collapse plays out.

What should investors do? Eric King asked Celente.

“Speaking for myself . . . You [referring to Eric King] know me,” Celente stated.  “I’ve always made it clear; I only put my money in gold and in silver,” and added, “And a friend of mine, to me, the best strategy that I’ve heard.  And again, I do not give financial advice.  His strategy is, every month he buys gold and silver.  Every month he buys gold and silver with the extra money he has.  Every month.

“It’s a brilliant strategy. . . I’m in gold for the long term.  I’m not getting out of gold, and I continue to invest in it when I can.”

Market Meltdown Nears; Fed Soon May Be Forced to Announce QE3

The financial indicator that traders have watched most for a sign of another Lehman-like swan dive in stocks has suddenly inched to the edge of the abyss in overnight trading.

That indicator is the U.S. 10-year Treasury—the instrument of choice among hedge fund mangers when stocks become vulnerable to that big drop—that long-awaited second shoe thud of the global financial crisis.

Greek bonds, again, are swan-diving, driving rates north of 20 percent, and Spanish CDS spreads with German paper reached a record 526 basis points in European trading, according to zerohedge.com.

A crash through important support at 1.8 percent on the 10-year note will most likely give the green light to traders to panic out of stocks and to rush into the next leg of the ride to the very top of the 30-year bond market bull market—which now has reached bubble territory.  Gold will most likely sell off, as banks shore-up capital reserves and hedge funds make client redemptions during an equity market sell off.

“If we see the yield on the U.S. 10-Year Note break below the 1.8 percent level, what it’s to signal to bond traders around the world is that we have a deflationary wave coming,” trader Dan Norcini of JSMineset.com told King World News, Friday.

As far back as September 2011, 1.8 percent has been the rate at which traders have sold bonds and bought back stocks in anticipation of a ‘Bernanke put’, the widely-held belief that the Fed will come to the rescue of the markets in one way or another to prevent another first-quarter 2009 market crash, which took the S&P500 down to 666 in a harrowing scare reminiscent of the Crash of 1987.

After calling the March 2009 market bottom—to the day—two years later, in March 2011, Marc Faber, the editor of the Gloom Boom Doom Report, told CNBC’s Joe Kernen that the Fed won’t allow stocks (the only asset class it can ‘manage’) to tumble.  The Fed will intervene, according to the Swiss-born economist and money manager who now lives in Chiang Mai, Thailand.

“We are in a mild recovery; markets are a discounting mechanism,” Faber explained in the March 2011 interview with CNBC.  “And we have already doubled in the S&P from the low.  So on the improvement, maybe the market sells off.”

Kernen asked, “You figure QE2 . . . they’ll pretend that they’re going to end in June, but then eventually they’re forced to start it up again. . . . QE8?”

“I made a mistake; I meant to say, QE18,” Faber quipped.

“So it will be here in 2012, as well, and maybe in 2013?” Kernan asked.

“For sure. For sure,” Faber maintained. “Until very recently, the Fed has had very few critics. . . Over the past few months a lot of critical comments have come up about the Fed and its money printing habits. But I bet you, the S&P drops 20 percent, all the critics will be silenced, and they will applaud new money printing.”

Back to Norcini:  JSMineSet’s Norcini agrees with Faber’s assessment.  The bond market is telling investors the stock market is vulnerable to a big decline as the S&P approaches the 1,325 level—a level that Charles Nenner of Nenner Research suggested on Financial SenseNewshour is the target for either a rebound in stocks or a further slide into a dangerous negative feedback loop of selling below 1,325.

“I think the reason the 1.8% level has been a floor so far is because most traders are convinced the Bernanke-led Fed will not allow deflation to occur,” Norcini continued.

If 10-year note rates decisively break below 1.8 percent, the next stop might be as low as 1.15 percent, according to Portola Group Founder Robert Fitzwilson, who said in aninterview with KWN two days earlier of the Norcini interview, that a drop in the 10-year to 1.15 percent can only mean a market meltdown of an unprecedented proportion.

“The Fed can’t let this happen,” Norcini continued, citing Fitzwilson earlier comments about the 10-year Treasury. “What alternative do they have?  I’m not a fan of central banking, but what are they going to do?  Do they just let this deflationary tsunami engulf the planet?  This is the Great Depression II that Bernanke fears and he will not let this happen.

“The bottom line is Bernanke may not want to do another round of QE, due to the political implications, but the market may force his hand if stocks and interest rates really begin to plummet.”

As of Monday, the U.S. 10-year Treasury trades at 1.77 percent, six basis points from its all-time low yield of 1.71 percent set on Sept. 22, 2011.

What’s Really Behind Utah’s Mock Earthquake Drill

Hot on the heals of House Bill 157, which legalizes the use of silver and gold bullion as currency, the state of Utah recently completed a joint mock emergency exercise between the state’s 400 national guard personnel and 48 guardsmen from the neighboring state of Wyoming.

The mock drill is a first of its kind since Utah Governor Gary Herbert declared the first week of April as ‘Earthquake Awareness Week’ for the state’s 2.8 million residents in 2010. Sign-up for my 100% FREE Alerts

“Earthquake expert, Bob Kerry, says Utah has a one-in-four chance for a 7.0 quake in the next 50 years,” Utah’s ABC4 News stated as the lead into the reporting of Utah’s first mock emergency drill.

However, an earthquake of that magnitude hasn’t hit Utah since the 17th century, according to state records.  In fact, since 1811, the only earthquakes registered in the U.S. greater than Richter Scale 7.0 occurred multiple times in Alaska, California, and a couple of times in Missouri.  The conclusion: earthquakes in Utah, of any significance, are very rare.

In addition, the auspicious timing of Governor Herbert’s ‘Earthquake Awareness Week’ annual events raises an additional red flag that points to well-intentioned deception.  Following the fall of Lehman Brother and plunge in global stock markets, discussions of imminent financial Armageddon became widespread in the media and public discourse, not just talk among a fringe few.  Well-known financial experts suggested the risk of a U.S. dollar collapse had increased markedly, including the implications of civil unrest, possibly leading to civil war.

In an Oct. 13, 2010, post on zerohedge.com, the site’s administrator Tyler Durden (Internet name) paraphrased Gluskin Sheff’s economist David Rosenberg’s comments regarding the Fed’s ZIRP policy, stating that the Fed’s plan is very  dangerous and “positions U.S. society one step closer to civil war if not worse.”

Nearly a week later, Time magazine on Oct. 19, 2010, titled, Will the Federal Reserve Cause a Civil War?

Jan. 23, 2011, Newsweek interviewed billionaire currency speculator George Soros about the global financial crisis.  He, too, fears a revolutionary outcome to a failed U.S. dollar—an outcome that historically could lead to far worse violence, loss of life and destruction of property compared with the aftermath of a natural disaster.

An excerpt from the Newsweek article about George Soros assessment of the financial crisis:

“I am not here to cheer you up. The situation is about as serious and difficult as I’ve experienced in my career,” Soros tells Newsweek. “We are facing an extremely difficult time, comparable in many ways to the 1930s, the Great Depression. We are facing now a general retrenchment in the developed world, which threatens to put us in a decade of more stagnation, or worse. The best-case scenario is a deflationary environment. The worst-case scenario is a collapse of the financial system.”

With financial collapse comes looting, violence and the potential for an overthrow of the government.

Interestingly, Utah, a state known for its disproportionate number of religious followers of the Church of the Latter Day Saints (LDS), or Mormons, has a history of promoting self-sufficiency and preparedness as well as fostering traditional fiduciary values.

In the face of a growing concern for a precipitous fall of the U.S. dollar’s value, the state’s LDS could be behind the drive for state-sanctioned preparedness to deal with a sudden spike in crime and the resulting chaos that will most likely ensure from a lack of law enforcement personnel to deal with a currency collapse.

In 1836, Joseph Smith, founder of the LDS movement, formed the Kirtland Safety Society (KSS), a quasi-bank to service the financial needs of the Mormon community in Kirtland, Ohio.  However, after being in operation for less than two years, the bank failed as part of the Panic of 1937 and alleged mishandling of bank funds by Smith.

Though the KSS ‘bank’ failed, the Mormon tradition of individual responsibility, self-reliance and distrust of public institutions remains strong today and may account for Utah’s leadership towards the reclamation of states rights under the 10th Amendment to the U.S. Constitution, as well as the Constitutionally inspired reintroduction of gold and silver as a means of protecting from the collapse of yet another fiat currency.  And the ‘Earthquake Awareness Week’ annual drills instituted by the Governor Herbert may merely serve as a euphemistically phrased reminder of an event approaching much worse than one of Mother Nature’s periodic unpleasant catastrophes. Sign-up for my 100% FREE Alerts